A financial report is a document that showcases your business’s activities and performances on a specific period, such as a quarter or year. It pulls in data from important documents like a balance sheet, income statement and cash flow statement to show how money is moving in and out of your company.
Stakeholders use these reports to make informed decisions about their investments, partnerships and loans. They want to see reliable reports that prove your company is growing steadily with healthy cash flow and responsible debt management. This kind of transparency builds trust and entices potential investors, partners and suppliers.
Create a financial report by collecting all relevant transactional information and reconciling it against accounting records. Choose a framework to guide your reporting, such as Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS). Depending on your audience and regulatory requirements, you may also need to provide different financial reports for various stakeholders.
Start with a balanced sheet that shows your assets, liabilities and shareholder equity. Then, move to an income statement that breaks down total sales revenue and highlights operating and non-operating expenses. Finally, finish with a cash flow statement that summarizes sources and uses of cash.
To make your reports more engaging, use charts and graphs to highlight trends or metrics. A well-formatted chart can save you time by cutting out the manual work of analyzing spreadsheet data. It’s also a good idea to include an executive summary that sums up key points and recommendations.
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